Performance Reviews in a Tough Economy

I was just wrapping up and organizing files from my contract job, getting ready to turn everything over to the full-timers that will be left behind when I leave on Thursday, and remembered an interesting conversation I had while rolling out a coaching & performance management training program last month.

Like many organizations, this one was forced to put annual performance raises on a shelf this year to control their budget. Everyone throughout the organization (the lucky group that is left after several tough rounds of layoffs) seems to have taken this fact in stride, I assume due to the effective communication campaign that the organization engages in regularly. In short, they get it; it's a tough economy and sacrifices need to be made.

However, what I found was, many managers would like the performance management process to get put on that shelf right next to the raises. One went as far as to vocalize that giving a performance review with no raise was a tedious and pointless process, a joke if you will.

What do you think? What about your managers? I subscribe to the theory that communicating with and developing your employees is essential all year round, with or without impact to pay. It's about developing your business to be more effective, more responsive, more customer-focused and ready to pounce at the first sign of a turn-around in your sector, not about whether you're giving out a 2% raise this year or not.

Be honest with your employees. They should understand the economic realities of your business. But more importantly, they should understand how they are performing against expectations, what can be improved and what they can do to grow with the Company. Grow the trust your employees have in you and they will weather the economic storm along side you.

And consider removing pay increases from the performance review cycle all together. If you give annual raises, set it apart from the performance review by 3 or 6 months. Focus on developing your employees and re-visit the pay question later on. Just a thought that bucks the current social trend.

ZW
www.azmobilehr.com